Expansion of Delta 9 cannabis facility in Winnipeg gets conditional OK from Health Canada

Health Canada has issued a conditional approval for the next phase of a Winnipeg-based marijuana producer's expansion plans.

Delta 9, which is already in the process of increasing the size of its facility to add600 grow pods, wants to addanother 143.

A pod provides 320 square feet of growing space and each one is expected toproduce an average of 31.5 kilograms of medical cannabis per year, saysa news release from the company, which operates in a warehouse in the east end of Winnipeg.

A new federal government law that will legalizerecreational marijuanais expected to come into effect in July 2018.

"We are anticipating a dramatic surge in demand for cannabis, so this is an important milestone in our journey to adequately supply the market for recreational cannabis once legalization occurs in July next year," said Delta 9 CEOJohnArbuthnot.

The company applied toamend its production and sales licence and received word earlier this week of the conditional approval.Health Canada will monitor Delta9's expansion through the construction phase, inspections for security, odour control measuresand other regulation requirements.

Full approval will not be granted until the expansion isdeemed to be in compliance with all the requirements.

"The grow pods allow us to expand our production capacity at a very low capital cost and they also have several other advantages," Arbuthnotsaid. "If there is a problem with the crop in one grow pod, it doesn't spread to the other crops we're growing.

"They allow us to compartmentalize risk of crop failure due to pests or disease. We are also finding that the quality and potency of our cannabis products have increased greatly since adopting the new hydroponic grow pods."

Of the 143 new pods being built, 20 will be reserved as "support pods" for use as cloning and mothering rooms, Arbuthnot said.

The remaining 123 grow pods are anticipated by management to produce approximately 3,875 kilograms of dried cannabis per year once they are fully operational.